Plant and Equipment Insurance for Contractors

Plant and equipment insurance is designed to respond to loss of or damage to the mobile plant, machinery and tools a business owns or is responsible for. That commonly covers excavators, loaders, telehandlers, rollers, generators, compressors, attachments and the smaller tools of trade that travel between sites.

Annex Risk Advisory is a Perth commercial insurance brokerage. As a plant and equipment insurance broker, we help contractors work through what is on the schedule and what it is insured for, review the values and wordings they currently hold, and explore options from a range of insurance markets.

Hired-in plant is the part most often missed. Hire agreements routinely make the hirer responsible for the item while it is in their possession, including for damage and sometimes for the hire company’s lost income while it is off the road. That obligation sits in the contract, not in the policy, unless cover has been arranged for it.

How a policy responds also varies between insurers. The basis of settlement, whether breakdown is included or only sudden damage, how items in transit between sites are treated, and what security conditions apply to plant left on site overnight all differ.

Reading the schedule and the hire agreements against how the business actually operates is where broker involvement tends to be most useful.

Plant exposure exists wherever a business owns, hires or operates machinery away from its own premises. That includes civil contractors running excavators and rollers, construction and infrastructure businesses with cranes, telehandlers and site equipment, mining and resources service contractors operating on client sites, earthmoving and landscaping operators, and trades whose tools of trade represent a significant part of their working capital.

Theft from sites is the most frequent driver of claims in this class, particularly for attachments, generators and small plant that can be removed quickly. Security conditions in the policy, and how plant is secured overnight, commonly affect how a claim is assessed.

Financiers set requirements as well. Where plant is under a chattel mortgage or lease, the financier typically requires cover to be maintained and to be noted on the policy, and the required basis of settlement is often specified in the finance documents.

Seasonal and project peaks complicate it further. Contractors routinely hire in additional plant for a single job, and the schedule that reflected the business at renewal can look very different halfway through a large contract.

Hire agreements are the other source. Where plant is hired in, the agreement usually sets what the hirer is responsible for and to what value, and those terms vary considerably between hire companies.

Where a hire agreement or a financier sets those requirements, the policy needs to be read against the agreement rather than assumed to comply.

Annex takes a risk-first approach. Before approaching any insurer, we work to understand what the business owns and hires, what the items are genuinely worth today, where they are used and stored, how they move between sites, and what hire agreements and finance documents require.

Schedules and values get particular attention, because they are the input most often carried forward unchanged. Plant values move with the used market, attachments are frequently left off the schedule entirely, and items sold or replaced mid-term are a common source of dispute at claim time.

From there we assist with insurance program design and placement, comparing options across a range of insurance markets and looking at the basis of settlement, whether breakdown is included, how hired-in plant and any associated hire company income is treated, transit between sites, and security conditions, alongside premium.

We can also review the insurance obligations in hire agreements, head contracts and finance documents to consider whether existing plant and equipment insurance aligns with them.

If a claim arises, claims management and advocacy is part of the service. Downtime is usually the real cost on a plant claim, so getting an assessment moving quickly matters. We assist with lodgement, documentation and insurer communication, and advocate for assessment under the terms of the policy.

Both directors are active practitioners, so clients deal directly with senior brokers rather than a rotating account team. Cover is subject to insurer approval, policy terms, conditions and exclusions. Annex Risk Advisory is a signatory to the NIBA Insurance Brokers Code of Practice, and our Financial Services Guide and Terms of Engagement are available online.